Analysis

By Dominic O’Connell, Today programme business presenter

Marks & Spencer has an organisation that is “silo-ed, slow and hierarchical”. Not the words of a hedge fund looking to short the shares of one of the nation’s favourite retailers, but the verdict of the company’s own chief executive, Steve Rowe.

The damning judgement is delivered in the company’s half-year results. They show the same pattern of trade of recent years – clothing in a slow slide, food a bit worse than expected, with like-for-like sales down nearly 3% – but are remarkable for their clear-eyed view of what needs to be done to break that pattern.

Fewer stores – 100 will close – a better online offering, and in general a tightening-up of management and structures that should save £350m a year.

Some critics will say that Mr Rowe is not going far enough, or fast enough, with some advocating a break-up of the company or other radical surgery.

There is a clue, though, in the half-year figures as to why stronger medicine has not been adopted. The average leasehold commitment that M&S has on its stores is 20 years. Going faster in closing stores or shrinking them would be extremely expensive.

Retail analyst Steve Dresser, director of Grocery Insight, tweeted: “You can’t run a business on meal deals and 25% off wines forever but these things take time to back out of.

“Closures of established stores will also impact food as it’s not always the case they didn’t perform – onerous leases also impacted.”

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